Leasehold in London: What do you think of this ground rent clause?

Lawmanuk

Just to add mortgage lenders also like the ground rent to be not more than 0.1% of the value of the flat at the beginning of the term so if the flat is less than £375,000 the rent may be an issue but as this is London then this may not be a problem:D

chalky_white_2

Increasing Ground Rent by an arbitrary figure is never particularly helpful (which is the 150.00% route) as it ignores the economic circumstances, which RPI does not do (to a point).

The regularity of increases is also not good, every 10 years allows the Ground Rent to increase quite quickly, particularly with the arbitrary calculation. RPI is unlikely to equate to that amount in 10 years!

However, you may want to query with the Seller's whether they will enter into negotiations with the Landlord to amend the Ground Rent clause. This is possible, and a number of Landlord will entertain these requests, for a fee. But you would request the Seller cover these costs.

If the Ground Rent cannot be amended, you should certainly consider whether you wish to proceed. In any event, your Lender may decide this for you.

A useful tool for arbitrary increases - check what the Ground Rent will be at the end of the term (keep using the multiplier until the Term has expired).